Tesla Inc. (NASDAQ:TSLA) shares face increased pressure as higher long-term interest rates and elevated oil prices make the electric vehicle maker especially vulnerable, institutional investor Gary Black said on Tuesday, warning that broader market forces are working against the stock even without a change in the company’s fundamentals.
Higher Rates Weigh On Tesla Valuation
The managing partner of The Future Fund LLC, wrote on X that “there’s been no change in $TSLA fundamentals,” but said that was precisely the problem. Tesla shares have fallen this year, though Black’s stated 12% year-to-date decline differs from Benzinga Pro data, which shows the stock down 7.75%.
“When long-term int rates go higher, long-duration (high P/E names) get whacked the most mathematically,” Black wrote. He said Tesla stock is likely to continue moving lower if Brent crude oil holds at $110 a barrel and the 10-year Treasury yield stays at 4.6%.
Black’s argument centers on Tesla’s valuation. He suggests that high-growth companies such as Tesla often trade as “long-duration” assets because investors expect much of their future cash flow years ahead. When bond …
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